ADJUSTMENT OF ECONOMIC POLICIES IN THE REPUBLIC OF MOLDOVA TO THOSE IMPLEMENTED IN NEIGHBORING EUROPEAN STATES

Abstract

The main purpose of this paper is to assess the economic vulnerabilities of the Republic of Moldova (RM) at the macro level, as well as to formulate policy proposals for sustainable economic development. The paper focuses on the analysis of time series data between the previous global crisis (2009) and that caused by the COVID-19 pandemic (2020). The paper identifies the following economic vulnerabilities of the RM, which formed during the years of independence: pro-cyclical fiscal policy, reduced public revenues, consumption-based economic model, low investment in the economy, declining labor force, exchange rate instability in crisis situations. The paper also highlights the differences between the policies of the RM compared to neighboring European countries, especially in terms of indicators of their economic stability in crisis situations. The paper identifies the following policy areas for sustainable economic development: modernizing the structure of the economy, countercyclical fiscal policy, increasing public revenues, streamlining public services, increasing public investment, developing of private pension funds, implementing public policy in the field of financial education, accelerating growth and investment in the future. In this context, the question is "what should national policies contain?" in order to ensure a sustainable development of national economy. The experience of the new EU Member States was taken into account in formulating policy proposals. If all these economic policies will be implemented in the first decade after the COVID-19 pandemic, the RM can move from a consumerbased economic model financed by loans to an investment-based and sustainable economic development one.